Hindustan Zinc Surges 5% as Silver Hits Record Highs Amid Tariff Fears

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AuthorKavya Nair|Published at:
Hindustan Zinc Surges 5% as Silver Hits Record Highs Amid Tariff Fears
Overview

Hindustan Zinc shares climbed nearly 5% on January 27, reaching a 52-week high as silver futures surged past Rs 3.5 lakh per kg on MCX. Silver ETFs also saw substantial gains, some up to 12%, mirroring the precious metal's rally. This movement is influenced by global tariff uncertainties, which are driving investors toward defensive assets.

Hindustan Zinc Surges on Silver Rally

Hindustan Zinc shares jumped approximately 5% on January 27, hitting a fresh 52-week high of ₹733. The Vedanta Group company, India's largest silver producer, benefited from a significant surge in silver prices, which are extending a record bull run and reaching new lifetime highs. Silver futures on MCX for March expiry climbed over 7% to ₹3,59,800 per kilogram, with later expiries also setting new records. Spot silver saw a 5.2% rise, reaching $109.22 an ounce and closing in on Monday's peak of $117.69. The white metal has appreciated a remarkable 53% year-to-date.

Global Tensions Boost Precious Metals

Analysts attribute the precious metals' rise partly to geopolitical uncertainties, particularly U.S. President Donald Trump's "disruptive policy approach" involving potential tariff increases on goods from countries like Canada and South Korea. This trade friction is bolstering demand for gold and silver as defensive havens. The threats of higher tariffs have significantly boosted investor confidence in precious metals as a safe store of value amid global trade disputes.

Silver ETFs Mirror Metal's Ascent

Exchange-traded funds focused on silver experienced a notable surge, mirroring the physical commodity's performance. Nippon India Silver ETF (Silverbees) advanced nearly 10% to a new 52-week high of ₹321.48. Groww Silver ETF also gained around 10%, while Zerodha Silver ETF surged over 11% to a record ₹34.7. HDFC Silver ETF saw an impressive jump of more than 12%, with other ETFs from UTI, Aditya Birla Sun Life, and Tata also reporting sharp gains.

Expert Caution Amidst Volatility

While the rally is strong, financial experts advise caution for new investors. Ross Maxwell, Global Strategy Operations Lead at VT Markets, highlighted valuation and sentiment risks, noting that silver's volatility can lead to sharp corrections after rapid climbs. He recommended staggered investments, such as dollar-cost averaging, to mitigate timing risk. For existing holders, Maxwell suggested booking partial profits as a rational risk-management strategy, especially for those who invested for tactical or short-term hedging. Investors with a long-term view based on industrial demand and supply constraints may consider holding core positions, but large fresh investments at current levels are not ideal.

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